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Den Fujita, Japan's Mr. Joint-Venture

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The first thing you need to know about Den Fujita is that he is the man who made the hamburger a Japanese icon.

In the 21 years since he launched the fast-food phenomenon here in a 50-50 venture with the McDonald's Corporation, Mr. Fujita has so saturated Japan with golden arches that they often seem etched in the popular imagination as deeply as the Imperial chrysanthemum. Many young Japanese would be surprised to learn that the Bi-gu Ma-ku was not invented on the Ginza.

This canny entrepreneur has also taken on the traditional notion that Japan is and should remain a nation of small shopkeepers. While American trade negotiators launched a frontal assault, he quietly pressed the Government to ease laws that had made it next to impossible to build large-scale stores. That cleared the way for what is regarded as one of the most promising new retail chains in Japan, Toys "R" Us, in which his business owns a 20 percent stake.

He has brought beef patties and french fries to people who were said to prefer rice. He introduced large-scale discounting to people who supposedly wanted only cozy but high-priced neighborhood shops. In a nation whose economic vigor comes from its exporting prowess, Mr. Fujita is a master importer. In a land of conformists, this virtuoso of self-advertisement is a classic contrarian.

While the Japanese are constantly urged to sacrifice for the collective good, he loudly declares himself a prophet of the cult of money -- a creed he has developed in a series of best- selling books in which he explains, in all seriousness, that he learned his business methods by observing the tactics "the Jews" use to exercise secret control over the world.

The 66-year-old Mr. Fujita, whose fortune is estimated by some at more than $1 billion, has prospered by taking the most un-Japanese ideas and products and making the Japanese love them. That is why even with his curious and some would say insulting philosophy, he is probably the most sought after joint-venture partner for American and European companies trying to make their way in this complex market. His latest joint venture: a deal with Blockbuster Video to develop a chain of 15 rental stores. Three have already opened.

"When I began to describe my views, some people said, 'This is just propaganda,' " the loquacious Mr. Fujita commented during an interview in his 44th-floor office here, decorated with rows of safety helmets because of an obsession with earthquakes. "They don't say that now." A Message for Gaijin

But there is a subtler reason for the remarkable success this unusual man has achieved, which carries an important message for foreigners trying to do business in Japan, or simply trying to gain a fresh perspective on the sometimes obscure soul of a country that can be as full of contradictions as Mr. Fujita.

Behind his philosophical ramblings and contemptuous remarks about the colorless Japanese business establishment -- he calls its leaders "scrap iron" -- is a lesson in how much change is really taking place under the surface of Japan's economy, and how one can seize the new opportunities. He has thrived not so much by overthrowing the system, but by seeing through many of the outdated myths the Japanese spread about themselves and turning them to his advantage.

Mr. Fujita has also long recognized that the accepted wisdom, even if it is wrong, limits the competition, since so few here are willing to go against the grain. Indeed, beyond the wacky claims -- Mr. Fujita says he believes Osakan businessmen are craftier than those from Tokyo because Jews settled in Osaka about 1,000 years ago, and that the Japanese will become blond if they eat enough hamburgers -- is a bottom-line manager who has found a way to open a seemingly closed system to outside influences.

"In business, the only justice is winning," Mr. Fujita has written. "There is neither clean money nor dirty money. In a capitalistic society, all methods of making money are acceptable."

His foreign business partners generally say they have embraced him because he is so hard-nosed -- and successful. "The truth is that when we came here there were not a lot of people who could maneuver through the bureaucracy," said James R. Cantalupo, president of McDonald's International. "He really knew how to do that. His rare quality is that he can bridge the two cultures."

Asked about Mr. Fujita's odd philosophy, Robert C. Nakasone, vice chairman of New Jersey-based Toys "R" Us, said, "This stuff never seemed to affect his business thinking, frankly. He's very much a pragmatist." Fortunes of War

There were few signs in Mr. Fujita's privileged youth in Osaka that he would grow to be so different. His father earned a comfortable living as an engineer at a British company. Mr. Fujita went to a prestigious high school and then entered Tokyo University's law department -- the training ground for Japan's government and business elite.

It was around this time that he began to see that change, even under the grimmest of circumstances, offered money-making opportunities. Mr. Fujita said he lost his father and two sisters in American bombing raids. But during the American Occupation, while he was still a university student, he realized that the best wages were being paid to translators working for Japan's former enemies.

His English language skills took him to General MacArthur's headquarters in downtown Tokyo, just across the moat from the Imperial Palace. In 1950, Mr. Fujita stepped off the accepted path for top university graduates and formed his own trading house, Fujita & Company.

Mr. Fujita clearly benefited from the fact that in an economy where most everything was rationed and imports were severely restricted, those who could navigate the barriers enjoyed generally strong demand and little competition. Fujita & Company prospered by importing, among other things, Christian Dior handbags and other women's accessories.

But Mr. Fujita's real break came in 1971, when McDonald's selected him as its partner in Japan. McDonald's wanted a strong entrepreneur who would be completely committed to the hamburger business.

"The Japanese are very hard-working, but very weak, very small and our faces are so pale," Mr. Fujita said without a trace of irony, explaining why he shifted from handbags to french fries. "I thought we had to strengthen ourselves. That's when I thought of beef."

McDonald's learned quickly that once they got past this cosmic reasoning Mr. Fujita was a very practical and stubborn businessman. For example, McDonald's insisted on a suburban setting for the first restaurant -- just like in the United States. Mr. Fujita would hear nothing of it. He insisted on the Ginza, Tokyo's central shopping district. He reasoned that in the context of a country where a love of hamburgers was not a given, a higher profile site was a necessity.

Mr. Fujita won. The Ginza store became one of the world's busiest McDonald's.

McDonald's had trouble lining up franchisees initially, so it kept ownership of most of the restaurants itself, bringing even more profits to Mr. Fujita. Today, only 155 of the 867 shops in Japan are owned by independent franchisees. In the meantime, Mr. Fujita found another way to capitalize on the arrangement. He had the privately held Fujita & Company -- now run by his two sons -- import many of the products McDonald's was using here, from Idaho potatoes to furniture.

What Mr. Fujita did not do was meddle with McDonald's way of making and selling food. The company's manual was imported largely unaltered. A Hanbaga Daigaku (Hamburger University) was set up to train the staff. Other than the Japanese and English on the menus, it was hard to tell the difference between a Japanese or American restaurant -- other than price. A Japanese Big Mac costs 380 yen, or about $2.90 -- inexpensive, given the price of other food; a cheeseburger here is 240 yen, or about $1.80. In Manhattan, a Big Mac is $2.89, a cheeseburger 99 cents. A Man of Influence

Mr. Fujita's forte was obtaining all the government approvals necessary for running and expanding the business. He brags, in fact, about his political influence, particularly his ties with Michio Watanabe, the current Foreign Minister. Perhaps more important, Mr. Fujita managed the critical issue of finding real estate in a country with some of the most expensive property in the world. Over time he has developed an impressive data base on property across Japan -- an asset that was a particular attraction for his next major partner, Toys "R" Us.

Sales at McDonald's Japan rocketed from 205 million yen that first year to 50 billion yen in 1980 and 207.7 billion yen last year, the equivalent of $1.6 billion. Japan now accounts for nearly 10 percent of McDonald's total sales. Nearly half a billion hamburgers were consumed here last year. McDonald's became Japan's leading restaurant chain in 1982.

"Most people cannot see the future," Mr. Fujita said. "But I am telling you, in 1994 we will make 400 billion yen in revenues. People laugh. You wait. I know how to do it." Sales of Fujita & Company have also zoomed up to 31.7 billion yen in the fiscal year that ended on Feb. 29, from 17.9 billion yen in 1987.

In 1972 Mr. Fujita began his career as a writer. His first book, "The Jewish Way of Doing Business," sold more than 200,000 copies in the first month. The book has been reprinted 63 times, selling more than a million copies. It is a combination autobiography and how-to book that purports to explain the business secrets all Jews know and use.

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That was followed by other hits, including, "Stupid People Lose Money," "How to Become Number One in Business," "How to Blow the Rich Man's Bugle Like the Jews Do," and "Using Super-Commonsense in Your Money-Making Strategies." A general theme is that the reader can win wealth and power by emulating the methods used by the great Jews.

"I personally don't pay much attention to that," said Mr. Cantalupo. "You have to put all that in the context of the human being. I have the utmost respect for him as a businessman and he's a pleasure to deal with as a person."

In fact, Mr. Fujita's writings are part of a popular Japanese literary genre. For decades books on supposed Jewish conspiracies have been produced in great numbers in Japan. They generally reflect less on Judaism, about which the authors rarely seem to have a very deep understanding, than on the Japanese themselves. Popular literature often depicts the Japanese as a chosen but embattled people who need to stick together to survive the forces arrayed against them. They identify with the image of the Jews they have produced.

Mr. Fujita insisted that he did not consider it insulting to characterize Jews purely as stereotypes.

"Please don't misunderstand," he said. "I'm trying to do something good for the Jewish people. Most Jewish people speak two or three different languages. They're good at mathematics. The Japanese should learn from that."

Mr. Fujita was catapulted into prominence once again when he agreed to have McDonald's Japan take a 20 percent interest in Toys "R" Us's new Japanese operations. Once again, it was not just another foreign company seeking entry into Japan, but a harbinger of major changes. Skirting Restrictions

The old laws permitted local merchants to raise a host of objections to the opening of large retail establishments, a kind of veto on competition. It was common for approvals to take 10 years or more. Toys "R" Us decided to challenge the restrictions.

The two problems were attacking the laws and finding a partner. The United States Government began work on the first priority years ago, pressing for changes in trade negotiations. On the second issue, Toys "R" Us, America's largest specialty retailer, pursued Mr. Fujita.

"To be honest with you, we'd followed him and knew about him," said Mr. Nakasone of Toys "R" Us. "He was not only our first choice, but our second, third, fourth, fifth and so on. After our first meeting we felt even more so that he was the right partner. We could see that he was a bit of a maverick. He was not only bilingual, but bicultural. He saw the potential for our business there immediately. He shared our impatience for trying to get it growing."

Mr. Fujita brought to the deal his knowledge of the bureaucracy and, most important, his real estate data base. That has proven valuable to Toys R' Us, which is about to open its third store here.

"This is really a real estate deal, not a retailing deal," said Mike Allen, an analyst at Barclays de Zoete Wedd Securities here. "But that does not make it any less important."

Because it has become increasingly difficult to find good sites for new McDonald's restaurants, Mr. Fujita said that as part of his new deal he will be constructing McDonald's at many of the new shopping centers where the Toys "R" Us stores will be located. Each will feed off the traffic created by the other.

Mr. Fujita said he had no immediate plans for new ventures, other than a longstanding desire to purchase a Japanese professional baseball club. But Japanese rules prohibit acquisition of a team by a company with a 50 percent or more foreign interest.

As one might expect, Mr. Fujita is undaunted by the challenge and has already chosen a name for the franchise -- the Bi-gu Ma-kus.

"If you want to understand the way I think, it is this," Mr. Fujita said, gesturing with a finger. "If 80 percent of the people say this is wrong, then you do it. If 80 percent say do it, don't go that way." CATERING TO RICE LOYALISTS

One of Den Fujita's concerns has been that McDonald's growth in Japan will level off. So he has constantly tinkered with the menu and considered other measures to maintain strong sales growth, experimenting with such new products as hot dogs, a shrimp burger and fried chicken.

Two years ago, he conducted an extensive survey of customers' desires and discovered that Japanese eating habits had changed dramatically over the past several decades.

"Of the people who eat out in the evenings, 40 percent eat rice, 36 percent eat bread and meat and 24 percent eat noodles," he said. "Before, most people ate rice. So we had really seen a big shift toward meat." More to the point, however, was that MacDonald's was still missing 40 percent of the market -- the rice eaters -- and there were no signs they could be converted to hamburgers.

"I realized that I didn't have to change the whole strategy, but just alter the menu," he said. So McDonald's Japan now features several rice dishes after 5:00 P.M. "If that's where the business is promising, I'll try it," Mr. Fujita said.

Den Fujita's first book "Yudaya no Shoho," or "The Jewish Way of Doing Business," has sold more than a million copies. Some excerpts:

From the time I was small I wanted to be a diplomat. I once told a neighbor who was a diplomat about my aspiration. But he said immediately, "I'm sorry to say, but you won't be accepted. There is an unwritten rule that people who speak Osaka dialect cannot become diplomats."

Just like the Jews, Osaka people are the victims of discrimination, in this case at the hands of people from Tokyo. Just like the G.I.'s I knew, who discriminated against Jews out of fear that the Jews could take away their money, people from Tokyo discriminate against Osakans because they are afraid they cannot compete against Osaka businessmen.

When I was working as an interpreter, I was a student at Tokyo University's law department. Already my father had died and I had to earn my tuition and living expenses. All traditional morals and values seemed to have been destroyed at that time because of Japan's defeat in the war. I had nothing but the fighting spirit of someone from Osaka. We may have lost the war, but I did not want to be beaten by social chaos or hunger or even by G.H.Q. [ General Headquarters for the American Occupation Forces ] . So I dared to enter the enemy's headquarters for a job.

Business people in and out of Japan call me a "Ginza Jew." I am satisfied with that and even call myself a "Ginza Jew." I am proud of being Japanese, but as a businessman I am happy being known as a Jew. Now Jews from around the world call me a "Ginza Jew," too, and treat me like an insider. They treat me differently than gentiles. The title of "Ginza Jew" is invaluable to me in doing business with Jewish traders who control business life in many countries.

Nonetheless, there is no shortage of examples of how I was laughed at, stepped on and insulted by Jews. But I endured these insults, just like the Jews have endured all their hardships.

A version of this article appears in print on March 22, 1992, on Page 3003001 of the National edition with the headline: Den Fujita, Japan's Mr. Joint-Venture. Order Reprints|Today's Paper|Subscribe